Gas Hub Investments LLC—the Baton Rouge, Louisiana-based company that recently bought SQRL Holdings LLC’s convenience-store business—is trying to force SQRL into Chapter 7 bankruptcy protection, claiming that SQRL owes its creditors more than $3 million in unpaid rent.
On Monday, three of SQRL’s creditors, including Gas Hub, filed a petition for involuntary bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Arkansas, according to court documents. Gas Hub said it is seeking to force SQRL into bankruptcy due to “breach of membership unit purchase agreement.”
Gas Hub claims SQRL owes it about $3.1 million in unpaid rent. K&A Endeavors LLC and MT Everest Investment LLC are also listed as petitioners on the involuntary bankruptcy petition and claim SQRL owes them about $61,500 and $62,600, respectively.
The money is for unpaid rents that Gas Hub said it did not know about when it purchased SQRL Service Stations LLC, the c-store arm of SQRL Holdings, in April, Sidney Scheinberg, an attorney from the law firm Godwin Bowman who represents the three creditors, told CSP Daily News.
“We were under the impression that everything was current when we were taking over, such as rent,” Scheinberg said. “Turns out they didn’t pay April rents to any of their landlords.”
Attorneys served a summons to Adam Lusthaus and Blake Smith of SQRL Holdings, notifying them that their creditors are trying to force the company into bankruptcy. SQRL Holdings has 21 days as of May 13 to respond to its summons for the involuntary bankruptcy case, court documents show.
Gas Hub could still operate SQRL’s convenience stores, some of which remain open, Scheinberg said. He did not know exactly how many stores were part of the acquisition.
Little Rock, Arkansas-based SQRL Holdings in April agreed to sell its c-stores under SQRL Service Stations LLC to Gas Hub Investments. At the time, SQRL CFO James Irvine told CSP that about 180 SQRL stores were currently open for business.
Irvine did not immediately respond to CSP’s request for comment on the bankruptcy petition.
In September 2023, SQRL signed a master lease on 210 former Mountain Express gas stations and convenience stores. Later, the Arkansas Business reported SQRL laid off as many as 400 employees and its founder and CEO Smith stepped away as CEO for health reasons and was replaced by Lusthaus.
The Department of Labor’s Wage and Hour Division is also investigating a case involving SQRL. The DOL told CSP there are two concluded 2023 cases filed with the Wage and Hour Division on SQRL, one of which $176 in back wages owed were paid.
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